August 2025 Employment Report

The U.S. economy added just 22,000 jobs in August according to the Bureau of Labor Statistics (BLS) survey of employers. The increase was below expectations for a gain of 75,000. Job gains in the prior two months were revised lower by 12,000. The economy added 29,300 jobs on average over the trailing 3 months versus a 209,300 average at the end of 2024. The health care sector added 31,000 jobs in August compared to a trailing 12-month average gain of 42,000. Federal government employment fell by 15,000 and is lower by 97,000 since January. Both manufacturing and construction sectors posted job losses during the month.

The BLS’s survey of households reported an increase in the unemployment rate to 4.3% in August from 4.2% in the prior month. The size of the U.S. labor force expanded by 436,000 while the survey of households revealed an increase in the number of unemployed individuals by 148,000.

Average hourly earnings — a proxy for wage growth — rose 0.3% for the month and 3.7% vs. a year ago. August earnings data matched consensus expectations. The 3-month annualized rate of wage growth slowed to 3.4% from 3.9%.

Bottom line

Data from the BLS’s survey of businesses remained weaker than expected in August, confirming July’s subpar report. The Federal Reserve will likely follow through with an expected rate cut of 0.25% at its September meeting. Markets have begun to lean toward pricing in more cuts in the fourth quarter than previously discounted. U.S. equities, interest rates and the Dollar were all lower in early trading following today’s report.